Business Law

Lecture No. (5)

The Merchant

The definition of the merchant is mentioned in Article 10 of the code of

commerce, as it stipulates that “Is considered a merchant:
1- Whoever performs by way of profession, in his name and for his own
account, a commercial act.
2- Any company which assumes one of the forms prescribed by
company, whatever the purpose for which the company is formed.
It is clear from above that the status of merchant could be acquired by a
natural person or a juristic person (a company).
The required conditions are not the same in these two cases. While it is
necessary for a natural person, to be considered a merchant, a company is
considered a merchant, once it assumes one of the forms established by
company law, without consideration to its object.

Chapter (1)
The Conditions of Merchant
First: To perform commercial acts by way of profession
Performing commercial acts by way of profession means that the natural
person has sufficiently and necessarily devoted his time and effort to carry
out the act of commerce regularly and continuously.
It also implies the repetition of the commercial activity. Therefor, if a
person occasionally undertakes acts of commerce, he will not acquire the
quality of a merchant due to the absence of the repetition element.
A person who is forbidden by the law of his profession from undertaking
commercial activities (ex: a civil servant – a Judge) will be nevertheless
considered a merchant if he performs commercial act by way of profession.
Moreover, the State or any of its administrative sub-division, or any other
public organization, may not considered a merchant even if it performs

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commercial acts by way of profession. However, such commercial acts will

be subject to the law of commerce.
It is worth noting that the performance of a commercial activity by way of
profession must be for the purpose of gaining profit. Thus, if this is absent,
the natural person will not acquire the quality of a merchant, even though
he has carried out and performed an act of commerce for example
charitable or cooperative associations.
Second: The merchant must perform the commercial acts in his name and
for his own account
This means that the person must be independent from others when
undertaking commercial activities and must bear the consequences of such
activities. In other words, he must gain the profits resulting from the
performance of the acts of commerce and bear their losses.
Therefore, if a person carries out acts of commerce in the name of a third
party and for the account of this third party shall not be deemed a
merchant. Hence, employees working for the merchant cannot acquire the
quality of a merchant as they have performed theses acts not in their own
names or for their accounts. Rather they perform acts in exchange for
salaries or wages.

Chapter (2)
Commercial Capacity
According to article 11 of the code of commerce is competent to undertake
commercial activities:
a) Any person who completes 21 years of age even if the law of his
nationality considers him a minor.
b) Whoever complete 18 years of age and obtain an authorization from
the Egyptian competent court.
It is clear of the above that only the person who attains the age of majority
21-year-old and being of sound mind is competent to undertake
commercial activities and become a merchant.

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A minor of 18 years old may also be considered competent if he obtains a

special court authorization. Such a minor is competent to perform
commercial acts and becomes a merchant, but only within the limit’s
established by authorization of the court.
Such minor can perform all acts required by his trade. He may also declare
bankrupt if he stops paying his commercial debts.

Is it possible for any person under 18 years to be a merchant?

The person who has not attained 18 years of age. This person cannot
undertake the profession of trade in Egypt. This rule applies to both
Egyptian and foreigners. It will also apply to the foreigner even if his State
law regards him as having complete legal capacity or allows him to perform
the profession of trade with restrictions.
Is it possible for a Married woman to be a merchant?
Egyptian woman, whether married or not, can carry out trade in Egypt once
she reaches 21 years of age. The other rules mentioned above as regards
minors are also applicable here.
Foreign woman, who is married and carries out trade by way of profession,
she is deemed to be performing it with the permission of her husband. If
the law applicable permits the husband to object to her trading by way of
profession or to withdraw his previous permission, the objection or
withdrawal of the permission is to be recorded in Egypt’s Commercial
Register and is to be published in The Register’s Journal. The objection or
withdrawal of the permission has no effect except as from the date of the
publication.